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Economic Data Puts the EUR in Focus ahead of the FED Policy Decision and Press Conference

Earlier in the Day:

It was a relatively quiet start to the day on the economic calendar this morning. The Aussie Dollar was in action in the early part of the day.

For the Aussie Dollar

Inflation was in focus this morning.

In the 2nd quarter, the annual rate of inflation accelerated from 1.1% to 3.8%. Economists had forecast a pickup to 4.0%.

Quarter-on-quarter, consumer prices rose by 0.8%, falling short of a forecasted 1.0% rise. In the 1st quarter, consumer prices had risen by 0.6%.

According to the ABS,

  • The most significant price rises in the June quarter were automotive fuel (+6.5%) and medical and hospital services (+2.4%).
  • Electricity prices rose by 3.3% as a result of the continued unwinding of the Western Australian Government’s A$600 electricity credit.
  • In the 2nd quarter, the trimmed mean annual rate of inflation picked up from 1.1% to 1.6%.

The Aussie Dollar moved from $0.73726 to $0.73660 upon release of the figures. At the time of writing, the Aussie Dollar up by 0.07% to $0.7367.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.08% to ¥109.870 against the U.S Dollar, while the Kiwi Dollar was up by 0.12% to $0.69640.

The Day Ahead

For the EUR

It’s a relatively quiet day ahead on the economic data front. Consumer sentiment figures from Germany will be in focus early in the European session.

With little else for the markets to consider, we can expect EUR sensitivity to the numbers. While economist have forecast for confidence to improve, the Delta variant could test consumer optimism near-term.

At the time of writing, the EUR was up by 0.03% to $1.1820.

For the Pound

It’s another particularly quiet day ahead on the economic calendar. There are no material stats to provide the Pound with direction.

Further demand for the Pound is likely following the IMF’s outlook towards the UK economy.

At the time of writing, the Pound was up by 0.06% to $1.3888.

Across the Pond

It’s a relatively quiet day ahead on the economic calendar. Trade data for June will be in focus later in the day. We don’t expect the numbers to have a material impact on the Dollar and the broader markets, however.

The market focus will be on the FED interest rate decision and press conference scheduled for late in the U.S session.

The question will be whether the FED Chair can continue to convince the markets of unwavering policy support.

At the time of writing, the U.S Dollar Spot Index was up by 0.02% to 92.453.

For the Loonie

It’s relatively quiet day on the economic calendar, with inflation figures in focus.

After a quiet start to the week, we will expect the Loonie to be responsive to the numbers.

Ultimately, however, market risk sentiment and crude oil prices will remain the key drivers on the day.

At the time of writing, the Loonie was up by 0.13% to C$1.2586 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.